Kewaunee Scientific Reports Results for First Quarter of Fiscal Year 2025

STATESVILLE, N.C., Sept. 11, 2024 /PRNewswire/ -- Kewaunee Scientific Corporation (NASDAQ: KEQU) today announced results for its first quarter ended July 31, 2024.

Fiscal Year 2025 First Quarter Results:

Sales during the first quarter of fiscal year 2025 were $48,393,000, a decrease of 2.9% compared to sales of $49,839,000 from the prior year’s first quarter. Pre-tax earnings for the quarter were $2,430,000 compared to $3,412,000 for the prior year quarter, a decrease of 28.8%. Net earnings were $2,193,000 compared to net earnings of $2,474,000 for the prior year quarter. EBITDA1 for the quarter was $3,325,000 compared to $4,305,000 for the prior year quarter. Diluted earnings per share was $0.74 compared to diluted earnings per share of $0.86 in the prior year quarter.

The Company’s order backlog was $159.4 million on July 31, 2024, as compared to $140.8 million on July 31, 2023, and $155.6 million on April 30, 2024.

Domestic Segment - Domestic sales for the quarter were $35,523,000, an increase of 0.3% from sales of $35,420,000 in the prior year quarter. Domestic segment net earnings was $2,871,000 compared to $2,711,000 in the prior year quarter. Domestic segment EBITDA was $4,738,000 compared to $4,578,000 for the prior year quarter. Domestic segment volumes were similar to the prior year quarter with demand remaining stable across all end-markets.

International Segment - International sales for the quarter were $12,870,000, a decrease of 10.7% from sales of $14,419,000 in the prior year quarter. International segment net earnings was $463,000 compared to $469,000 in the prior year quarter. International segment EBITDA was $696,000 compared to $670,000 for the prior year quarter. The decline in sales is attributable to customer construction site delays in India which pushed out the timing of deliveries.

Corporate Segment – Corporate segment pre-tax net loss was $1,992,000 for the quarter, as compared to a pre-tax net loss of $1,004,000 in the prior year quarter. Corporate segment EBITDA for the quarter was ($2,109,000) compared to corporate segment EBITDA of ($943,000) for the prior year quarter. The change in EBITDA was driven by an increase in professional service fees during the quarter that are unrelated to the core business and the net change in Corporate cost allocation methodology across our business segments.

Total cash on hand on July 31, 2024 was $25,186,000, as compared to $25,938,000 on April 30, 2024. Working capital was $56,012,000, as compared to $49,291,000 at the end of the first quarter last year and $56,037,000 on April 30, 2024.

The Company had short-term debt of $3,627,000 as of July 31, 2024, as compared to $3,099,000 on April 30, 2024. Long-term debt was $28,293,000 on July 31, 2024, as compared to $28,479,000 on April 30, 2024. The building lease from the Company’s December 2021 sale-leaseback transaction accounts for $27,958,000 of the long-term debt on July 31, 2024 and $28,133,000 of the long-term debt on April 30, 2024. Long-term debt, net of the sale-leaseback transaction, was $335,000 on July 31, 2024 as compared to $346,000 on April 30, 2024. The Company’s debt-to-equity ratio on July 31, 2024 was 0.68-to-1, as compared to 0.70-to-1 on April 30, 2024. The Company’s debt-to-equity ratio, net of the sale-leaseback transaction, on July 31, 2024 was 0.19-to-1, as compared to 0.20-to-1 on April 30, 2024.

“Our financial performance for the first quarter of fiscal year 2025 was solid,” said Thomas D. Hull III, Kewaunee’s President and Chief Executive Officer. “Domestic segment operating performance was improved when compared to last year’s first quarter as our manufacturing loadings remain at a consistent level. Site delays in India on multiple projects impacted our ability to ship products and deliver services leading to a slightly down quarter when compared to the prior year first quarter.”

“Looking ahead, our backlog remains strong and quoting for new projects remains high, providing a line of sight to another strong year for the Company.”

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1 EBITDA is a non-GAAP financial measure. See the table below for a reconciliation of EBITDA and segment EBITDA to net earnings (loss), the most directly comparable GAAP measure.

EBITDA, Segment EBITDA, Adjusted EBITDA, and Adjusted Segment EBITDA Reconciliation

Quarter Ended July 31, 2023

Domestic

International

Corporate

Consolidated

Net Earnings (Loss)

$ 2,711

$ 469

$ (706)

$ 2,474

Add/(Less):

Interest Expense

380

36

14

430

Interest Income

(213)

(1)

(214)

Income Taxes

913

282

(298)

897

Depreciation and Amortization

574

96

48

718

EBITDA

$ 4,578

$ 670

$ (943)

$ 4,305

Quarter Ended July 31, 2024

Domestic

International

Corporate

Consolidated

Net Earnings (Loss)

$ 2,871

$ 463

$ (1,141)

$ 2,193

Add/(Less):

Interest Expense

441

21

10

472

Interest Income

(174)

(173)

(347)

Income Taxes

764

279

(851)

192

Depreciation and Amortization

662

107

46

815

EBITDA

$ 4,738

$ 696

$ (2,109)

$ 3,325

Professional Fees

7302

730

Adjusted EBITDA

$ 4,738

$ 696

$ (1,379)

$ 4,055

____________________

2 Professional fees not related to our core business

Adjusted Consolidated Statement of Operations Reconciliation

Three Months Ended

July 31,

As Reported

2024

Professional

Fees

Adjusted

2024

2023

Net sales

$ 48,393

$ —

$ 48,393

$ 49,839

Cost of products sold

35,905

35,905

37,925

Gross profit

12,488

12,488

11,914

Operating expenses

9,913

7303

9,183

8,106

Operating profit

2,575

730

3,305

3,808

Pension expense

(41)

Other income, net

327

327

75

Interest expense

(472)

(472)

(430)

Profit before income taxes

2,430

730

3,160

3,412

Income tax expense

192

1534

345

897

Net earnings

2,238

577

2,815

2,515

Less: Net earnings attributable to the non-controlling interest

45

45

41

Net earnings attributable to Kewaunee Scientific Corporation

$ 2,193

$ 577

$ 2,770

$ 2,474

Net earnings per share attributable to Kewaunee Scientific Corporation stockholders

Basic

$ 0.77

$ 0.20

$ 0.97

$ 0.87

Diluted

$ 0.74

$ 0.19

$ 0.93

$ 0.86

___________________

3 Professional fees not related to our core business

4 Estimated tax impact of professional fees not related to our core business

About Non-GAAP Measures

The Company includes non-GAAP financial measures such as adjusted net earnings and adjusted net earnings per share, in the information provided with this press release as supplemental information relating to its operating results. Adjusted net earnings represents GAAP net earnings adjusted for professional fees not related to its core business and the corresponding tax impact. This financial information is not in accordance with, or an alternative for, GAAP-compliant financial information and may be different from the operating or non-GAAP financial information used by other companies. The Company believes that this presentation of adjusted net earnings and adjusted net earnings per share provides useful information to investors regarding certain additional financial and business trends relating to its financial condition and results of operations.

EBITDA and Segment EBITDA are calculated as net earnings (loss), less interest expense and interest income, income taxes, depreciation, and amortization. Adjusted EBITDA and Adjusted Segment EBITDA are calculated as EBITDA or Segment EBITDA less the impact of the professional fees not related to the Company’s core business that were incurred during FY25, as discussed in more detail above. We believe EBITDA, Segment EBITDA, Adjusted EBITDA, and Adjusted Segment EBITDA allow management and investors to compare our performance to other companies on a consistent basis without regard to depreciation and amortization or the costs incurred related to our one-time pension termination transaction executed during fiscal year 2024, which can vary significantly between companies depending upon many factors. EBITDA, Segment EBITDA, Adjusted EBITDA, and Adjusted Segment EBITDA are not calculations based upon generally accepted accounting principles, and the method for calculating EBITDA, Segment EBITDA, Adjusted EBITDA, and Adjusted Segment EBITDA can vary among companies. The amounts included in the EBITDA, Segment EBITDA, Adjusted EBITDA, and Adjusted Segment EBITDA calculations, however, are derived from amounts included in the historical consolidated statements of operations. EBITDA, Segment EBITDA, Adjusted EBITDA, and Adjusted Segment EBITDA should not be considered as alternatives to net earnings (loss) or operating earnings (loss) as an indicator of the Company’s operating performance, or as an alternative to operating cash flows as a measure of liquidity.

About Kewaunee Scientific

Founded in 1906, Kewaunee Scientific Corporation is a recognized global leader in the design, manufacture, and installation of laboratory, healthcare, and technical furniture products. The Company’s products include steel and wood casework, fume hoods, adaptable modular systems, moveable workstations, stand-alone benches, biological safety cabinets, and epoxy resin work surfaces and sinks.

The Company’s corporate headquarters are located in Statesville, North Carolina. Sales offices are located in the United States, India, Saudi Arabia, and Singapore. Three manufacturing facilities are located in Statesville serving the domestic and international markets, and one manufacturing facility is located in Bangalore, India serving the local, Asian, and African markets. Kewaunee Scientific’s website is located at http://www.kewaunee.com.

This press release contains statements that the Company believes to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this press release, including statements regarding the Company’s future financial condition, results of operations, business operations and business prospects, are forward-looking statements. Words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “predict,” “believe” and similar words, expressions and variations of these words and expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions, and other important factors that could significantly impact results or achievements expressed or implied by such forward-looking statements. Such factors, risks, uncertainties and assumptions include, but are not limited to: competitive and general economic conditions, including disruptions from government mandates, both domestically and internationally, as well as supplier constraints and other supply disruptions; changes in customer demands; technological changes in our operations or in our industry; dependence on customers’ required delivery schedules; risks related to fluctuations in the Company’s operating results from quarter to quarter; risks related to international operations, including foreign currency fluctuations; changes in the legal and regulatory environment; changes in raw materials and commodity costs; acts of terrorism, war, governmental action, and natural disasters and other Force Majeure events. The cautionary statements made pursuant to the Reform Act herein and elsewhere by us should not be construed as exhaustive. We cannot always predict what factors would cause actual results to differ materially from those indicated by the forward-looking statements. Over time, our actual results, performance, or achievements will likely differ from the anticipated results, performance or achievements that are expressed or implied by our forward-looking statements, and such difference might be significant and harmful to our stockholders’ interest. Many important factors that could cause such a difference are described under the caption “Risk Factors,” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended April 30, 2024, which you should review carefully, and in our subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. These reports are available on our investor relations website at www.kewaunee.com and on the SEC website at www.sec.gov. These forward-looking statements speak only as of the date of this document. The Company assumes no obligation, and expressly disclaims any obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Kewaunee Scientific Corporation

Condensed Consolidated Statements of Operations

(Unaudited)

($ and shares in thousands, except per share amounts)

Three Months Ended

July 31,

2024

2023

Net sales

$ 48,393

$ 49,839

Cost of products sold

35,905

37,925

Gross profit

12,488

11,914

Operating expenses

9,913

8,106

Operating profit

2,575

3,808

Pension expense

(41)

Other income, net

327

75

Interest expense

(472)

(430)

Profit before income taxes

2,430

3,412

Income tax expense

192

897

Net earnings

2,238

2,515

Less: Net earnings attributable to the non-controlling interest

45

41

Net earnings attributable to Kewaunee Scientific Corporation

$ 2,193

$ 2,474

Net earnings per share attributable to Kewaunee Scientific Corporation stockholders

Basic

$ 0.77

$ 0.87

Diluted

$ 0.74

$ 0.86

Weighted average number of common shares outstanding

Basic

2,849

2,860

Diluted

2,967

2,885

Kewaunee Scientific Corporation

Condensed Consolidated Balance Sheets

($ in thousands)

July 31, 2024

April 30, 2024

(Unaudited)

Assets

Cash and cash equivalents

$ 24,211

$ 23,267

Restricted cash

975

2,671

Receivables, less allowances

43,545

45,064

Inventories

19,285

20,679

Prepaid expenses and other current assets

4,683

5,136

Total Current Assets

92,699

96,817

Net Property, Plant and Equipment

17,112

17,649

Right of use assets

6,944

7,454

Deferred income taxes

8,091

7,401

Other assets

7,172

5,445

Total Assets

$ 132,018

$ 134,766

Liabilities and Stockholders’ Equity

Short-term borrowings

$ 3,627

$ 3,099

Current portion of lease obligations

2,144

2,234

Current portion of financing liability

731

713

Accounts payable

20,619

23,262

Other Current Liabilities

9,566

11,472

Total Current Liabilities

36,687

40,780

Long-term portion of lease obligations

5,333

5,669

Long-term portion of financing liability

27,227

27,420

Other non-current liabilities

5,258

4,688

Total Liabilities

74,505

78,557

Kewaunee Scientific Corporation Equity

56,023

54,760

Non-controlling interest

1,490

1,449

Total Stockholders’ Equity

57,513

56,209

Total Liabilities and Stockholders’ Equity

$ 132,018

$ 134,766

Contact:

Donald T. Gardner III

704/871-3274

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SOURCE Kewaunee Scientific Corporation

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